(Feb-18) The market remained muted yesterday, with no major FX moves.
On the geopolitical front, US and Russian officials held their first round of talks regarding the war in Ukraine, discussing the possibility of broader cooperation. US Secretary of State Marco Rubio mentioned that sanctions on Russia will remain until a deal to end the conflict is reached.
In commodities, oil prices held steady due to the potential postponement of OPEC+ supply increases and uncertainty around Russian oil flows. Gold prices fluctuated and traded near a new record high.
The euro and pound have also been range bound this week:
Against the crosses:
Will be watching the budget speech today at 14h00 SAST.
(Feb-13) CPI print yesterday supported FEDs decision to hold rates steady and the general talks between US and Rassia to end the war has boosted risk sentiments.
(Feb-17) We saw a general USD weakness on Friday across the board which was related to various factors and optimism around de-escalating geopolitical risks, this however is still not yet confirmed.
(Feb-19) President Donald Trump announced plans to impose 25% tariffs on automobile, semiconductor, and pharmaceutical imports, with an announcement expected by April 2. He aims to give companies time to establish US-based operations to avoid tariffs. These new levies could significantly impact industries and lead to higher consumer prices, particularly affecting countries like Mexico, South Korea, Malaysia, and Singapore.
(Feb-10) SA’s Finance Minister, Enoch Godongwana, will deliver the 2025 Budget Speech on Wednesday, February 19th. The speech will outline the government’s financial, economic, and social commitments for the year, focusing on balancing economic growth with support for vulnerable communities.
(Feb-17) Volumes improved towards the end of the week, with 3 days trading higher that the recent ADV.
(Feb-18) Pull back in volumes due to US holiday on Monday.
(Feb-13) Clients ended yesterday being net-short ZAR: - Range for today: 18.60 - 18.30.
(Feb-17) Saw the market reject the move lower in ZAR, with implied topside at 18.65.
(Feb-10) Clients are now net-long USDZAR.
(Feb-11) We see continued net-long positions in ZAR.
(Feb-17) Saw the market reject the move lower in ZAR, however the the weaker USD on Friday (Feb-14) saw ZAR hitting lows of 18.2995.
(Feb-18) ZAR made the expected correction yesterday to 18.45. Given that we failed to break above 18.50, a move lower but above 18.30 is likely.
(Feb-19) Rand set for a good day today as we see ZAR failing to break above 18.50 in the recent days.
(Feb-17) Volumes muted today as its a US holiday.
(Feb-18) Rand shows zero interest of making moves today, we remain at that rand volume weighted price of 18.40.
By Thuto Mukena - Institutional Sales Specialist (Feb-19)
Budget Day pressure on ZAR: The Rand opens a touch weaker, reversing some of yesterday’s gains as markets positioned ahead of the local budget statement. USD/ZAR 1-week implied vol also caught an early bid, rising by 0.62 vol p.p from the previous close. Despite this, the broader trend since Monday has been a steady grind lower in implied vols, reflecting market complacency in the vol space ahead of the budget. The 1-week USD/ZAR volatility risk premium has narrowed further below its 1-week average as traders continue adjusting vol expectations downward.
All eyes are on the Fed minutes later today, but in the absence of new aggressive tariff updates from Washington, G10 and EM 1-week implied vols broadly trended lower. The U.S. dollar saw some recovery across most pairs as pockets of uncertainty lingered. In G10, AUD/USD 1-week implied vol led the decline, dropping 105bps. In EM, USD/INR and USD/MXN 1-week implied vols saw notable moves lower, down 59bps and 58bps, respectively.
By sizwe Mfayela - Institutional Sales Specialist (Feb-14)
Egypt
Kenya
Ivory Coast
Nigeria
Rwanda
Senegal
Zimbabwe
Eurobonds
NGERIA
ANGOL: Locals sold into ETF and street bids
IVYCST: Flows were relatively light, but overall turned two-way, with the bid for the $ bonds on the curve going softer.
KENINT: Some fiscal-related headlines yesterday but flows were muted, with locals net sellers of risk to add to the real money account selling.
SENEGL: Was very much in price discovery in a 3pt range since the headlines hit on Wednesday as bid and offers felt very skittish, forcing swift repricing on each print. Overall, SENEGL underperformed on the day with the curve bear flattening.
SOAF: An active session with headlines keeping flows on the curve two-way. US PPI came out higher than expected - after a higher-than-consensus CPI print yesterday - but that softened the bid only for a split second. Real money and ETFs were net buyers of risk, whilst there was selling from the street. Long-end continued to trade better, with front-end bonds catching a bid.
Economic data releases